RGD updates on pricing dispute with British Sugar

The Real Good Food Company was informed yesterday by the Competition and Markets Authority (CMA) that Napier Brown's complaint against British Sugar had not passed the CMA's prioritisation procedure.

In a detailed letter to the company, the CMA has thanked the company for bringing the matter to its attention and made the point that the case had 'strategic value'.

However, the CMA felt that conducting a full investigation would, taking into account the complexity of the issues involved, require significant economic and legal resources and, on the basis of previous similar investigations, take at least two years to conclude.

"They informed us that as they currently have 9 live competition enforcement cases, the strategic benefits are outweighed by the risks and resources involved in pursuing the case," The Real Good Food Company said in a statement.

"The CMA acknowledged that the decision not to prioritise does not mean that Napier Brown's case is not valid, merely that the CMA does not see it as having sufficient priority within its portfolio of cases at present and makes the point that it does not prevent it from deciding to open an investigation in the future."

Had Napier Brown's case been weak, the Group believed that it presumably would not have taken first the Office of Fair Trading (OFT) and then the CMA 12 months to consider whether to take the matter further.

"The Group suspects that the recent dramatic reduction in sugar prices may have contributed to the CMA believing that the market has sufficient competition, the company said.

"That may be so at present, when supply of sugar within the EU is plentiful, but the Group remains concerned that when stocks tighten, which the Group believes they inevitably will, competition will prove less than sufficient.

"Napier Brown has an outstanding offer to take the complaint back to the European Competition Authorities in Brussels and intends to open discussions with them shortly.

"At least the decision gives the business some clarity. Contingency plans for such an outcome were already in place and as such this decision does not affect current trading."

At 9:07am: (LON:RGD) Real Good Food Company The PLC share price was 0p at 31p

Story provided by StockMarketWire.com

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